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Explained: Facebook’s “Logical”, Performance-Focused Tweak to its Click Model

Explained: Facebook’s “Logical”, Performance-Focused Tweak to its Click Model

Cost per click is changing on Facebook, and in a big way.

The network informed advertisers last night (July 8) that its CPC model would be altered to only request payment on what it describes as “link clicks”. 

In a post on Facebook for Business, the portal for any updates related to the group’s online ad biz, an introduction to the changes read:

“Advertisers come to Facebook to drive business goals, like in-store traffic and website clicks, and they need to know how effective their ads are at driving their stated goal. That’s why starting today, as part of our latest API release, we’re updating the definition of cost per click (CPC) on Facebook to only include clicks to websites and apps, and not likes, shares and comments.”

The network went on to list a series of changes to its current click model, and PerformanceIN’s contributors have already praised the network for making a logical move.

True performance

The previous version of Facebook’s CPC stated that advertisers must pay for any interaction with their inventory on the site. This would have sat fine with certain parties, who would have used engagement metrics such as likes, comments and shares to draw the line between social success and failure.

But Facebook wants to change this. Payments are now going to be made on a different set of objectives, with plenty of focus - surprisingly - on the ability to have a user navigate away from their account and onto another site or property.

The new model includes clicks to external sites, and engagement with ‘call to action’ requests such as shop now, which would also see the user stray from their Facebook news feed. Clicks for app installs and to view videos on another site are new additions, which in both instances would result in re-direction.

On the flipside, Facebook could be saying that if advertisers want to direct a user to their clip on YouTube or have them migrate from the site to another domain, they’ll have to pay up.  

That’s not to say that Facebook won’t be looking out for itself with the new model, though. Payment is now made on clicks to apps built using its very own Canvas feature, which keeps the user on-site.

Catering for the crowd

Facebook says the changes, added to version 2.4 of the Ads API on Wednesday and set to land on its Ads Manager and Power Editor tools, seek to cater for advertisers that are demanding a much greater return on their investment.

A statement from the company added:

“Over the last few years, Facebook’s ad offerings have become increasingly tailored to helping advertisers meet specific business objectives. This update is part of that effort: it’s designed to provide measurement that’s more closely aligned with how advertisers are bidding so they can better optimize their campaigns against their stated goals.”
 
In answering the question of whether the old model is still relevant, the post stressed that advertisers could still bid on their old engagement clicks via the optimisation settings, but equally that “having lots of likes and shares on an ad or post is rarely an end unto itself”.

Speaking to PerformanceIN, David Zelinker, product manager for ad tech group and Facebook Marketing Partner Kenshoo, was in full support of Facebook’s shift towards the roots of performance marketing.   

“Facebook's shift to separating off-site clicks from social clicks makes logical sense as they continue their move towards objective based ad buying,” he commented.

“This change allows our clients, focused on performance marketing, to pay for the action they care about most: offsite link clicks - whether that be clicks to Shop Now, Install an App, Sign Up, or any other click that takes a consumer to an advertiser's desired destination.”

Will Facebook’s actions cause more networks to place greater emphasis on 'performance' metrics? Have your say below.

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Got a question or comment – tweet Richard @RichToweyPI or comment on Twitter, Facebook or LinkedIN.

Richard Towey

Richard Towey

Richard serves as head of content at PerformanceIN. After many years spent covering developments from the automotive, sports, travel and finance sectors, he eventually turned his full attention to reporting on stories from the fast-evolving world of digital marketing. Richard now heads up the editorial team at PerformanceIN: the performance marketing industry's leading publication.  

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